‘Parliamentary system best solution to corruption’

The risk of sudden death makes the need for succession planning mandatory to prevent acrimony and legal tussles. This, corruption and best practices in wealth management, were the focus at the 2013 Punuka Annual Lecture in Lagos. JOSEPH JIBUEZE reports.

The topic was multifaceted, but the speakers dealt well with them.

The 2013 Punuka Annual Lecture, organised by Punuka Attorneys and Solicitors, had the theme: Wealth Management and Succession Planning: Best Practices, Anti-Corruption and Compliance, and Red Flags.

Former Chief Justice of Nigeria, Alfa Belgore, who chaired the occasion, was more concerned with how to curb graft in Nigeria, which he believes is at the root of underdevelopment and social crisis.

To him, a return to the parliamentary system of government will help bring an end to the country’s endemic corruption.

According to Belgore, the Presidential system is not only wasteful, breeds corruption and encourages abuse of power, it also does not accord with Nigeria’s history and culture

He said official sleaze does not only manifest in looting of public funds; it is evident in the appointment of unqualified persons into important political posts – appointees who do the bidding of the President of Governor because they can be removed at a whim.

The solution, therefore, is a parliamentary system where Ministers and Commissioners will be elected – a process which he said could guarantee the credibility of those in government.

Belgore called for constitutional roles to be given to traditional institutions.

“Yes it is very good. It’s cheaper for us,” Belgore said of the parliamentary system, adding: “Corruption in the past can be regarded as child play compared to what is going on today because you have people who are not elected who are taking very strategic offices – that is like the United States of America.

“Culturally, we are different from them. We have a very established society. We call Nigeria the Federal Republic of Nigeria, but it is a different republic from other republics.

“We still have Obas; we still have the Emirs and they are still very useful but they are not involved in our Constitution making. That has led to the tragedy. The respect for these traditional institutions is dying gradually.

“But if people who are going to decide matters in this country are elected – your Ministers are not elected, your Commissioners are not elected – it is creating problems for us because they can be removed at any time, whereas in parliamentary system, a minister or commissioner is a legislator.

“They could be there for the constitutional terms of office; it could be five years or six. I believe sincerely that to kill corruption, we must go back to the system that we understand best. We must involve the village heads to the top.

“Corruption doesn’t necessarily make you rich, it could begin from a messenger. ‘I want to see the oga (boss) inside the office’ and he will say ‘no’. Corruption may be in your favouring somebody over another. There are five people to be appointed; the most qualified is there but you don’t want him because he is not your loyalist. That is corruption.

“And, its better to just call Nigeria the Federation of Nigeria; don’t call it the Federal Republic of Nigeria, else you are going to lose your tradition. You have your tradition, but you are losing your tradition by borrowing the one that doesn’t belong to you.

“That is a disaster. We need to go back to basic. It doesn’t cost you much. The village head, the Obis, the Obas, Emirs. We are still paying them, but we are not using them,” Belogore said.

Lagos Deputy Governor Adejoke Orelope-Adefulire, who was a special guest, said although the President system may be expensive, Nigeria would be better through effective leadership.

She said it took America years to get its Presidential system right; therefore, with time, Nigeria would be great again.

“Some say the Presidential system is expensive, and that parliamentary system will afford us the opportunity of knowing the rules and playing by the rules, but we have to go from one step to another,” she said.

The guest lecturer, First Vice-President, Mirabaud Private Bank of Geneva and Director-in-Charge of Africa, Mr John Cross, said corruption cannot be effectively tackled without the corporation of financial institutions.

He spoke on the topic: Wealth Management and Succession Planning: Best Practices, Anti-Corruption Compliance and Red Flags.

According to him, banks could help prevent money laundering by raising questions about ownership of funds, investigating whether they have been legally earned, whether the funds transfer was done through legal means, and whether the funds are being utilised for legitimate purposes.

On wealth management, Cross said the function of the wealth manger involves preserving wealth rather than creating wealth. In other words – deploying capital and not creating capital.

In creating wealth, one is pushed into a position where risk needs to be taken to survive; but in managing wealth, one can choose the kinds of risk to be involved in, he said.

The goal of managing wealth, he said, is to help others and yourself enjoy what you have achieved.

Going about it, Cross said, involves diversification, which, according to him is key to long term success. There should be diversification in asset managers as limited losses are better than excessive gains, he added.

“Always check the legality of your structures with a legal expert. The international nature of wealth management means that one can make mistakes more easily and this should be avoided.

“Have a good, honest and open relationship with your bankers. They will be able to help you avoid mistakes and can also help you correct errors or mistakes if they know about them. If you have any questions, ask before transacting, not after.

“Do not break the law. Certain jurisdictions have more rules than others, try to find the ones that suit your needs the most (transactional vs. storage of wealth). Also, some jurisdictions have better reputations than others, it may be easy to get money into a bank in Iran, but will be almost impossible to get it out of Iran into Switzerland.”

Managing Director, Meristem Wealth Management Limited, Sulaiman Adedokun said many business owners spend years trying to build their business; however, they never actually plan for what will happen should they decide to sell the business, turn it over to someone else, or simply cease operations.

“Succession planning is significant for any business and the process should be commenced immediately after setting up the business such that the focus is not lost in the course of doing business.

“It is important however for the business owners/founders to be sincere with themselves and align their goals with a good exit option that create value for them and give them peace of mind,” Adedokun said.

Group Head, Private Banking at Fidelity Bank Plc, Chioma Nwankwo, said between a fast decreasing life expectancy and a notorious lack of succession planning, Nigeria has become a hotbed of trust, probate and disputes amongst families who have previously used informal relationships to govern the handover of assets

“The society is awash with stories of great men and women whose sudden exit have created wealth management and succession planning impasse for their families, with resultant bitter acrimony and legal tussle that have torn their families apart.

“In few circumstances where people have purportedly sought to manage their wealth and plan for their exit, the strategies adopted in many cases fall short of international best practices and consequently infringe on the laws and policy directions in this regard.

“In a similar vein, companies are not spared the consequences of lack of purposeful wealth management and succession planning strategies. Many companies have gone under as a result of inadequate succession planning.

“In addition, regulation and compliance across the world in the areas of taxation and prevention of terrorism, money laundering and corruption have greater emphasis in good estate planning and wealth management.

“The risks of lack of planning are now beyond more loss of inheritance but include criminal liability. Understanding the red flags can help exposed persons and corporations navigate this difficult terrain,” Idigbe said.

mong guests are Acting President of the Court of Appeal, Zainab Bulkachuwa, represented by Presiding Justice, Lagos Division, Justice Amina Augie; pioneer chairman, Nigerian Bar Association Section on Business Law, George Etomi; representative of Chairman of Securities and Exchange Commission, among others.